B
BC Squared
Guest
Anyone have their team set up as a business for tax purposes? Could this help recoup costs assuming you weren't winning every week??
Still Smokin
Full Fledged Farker
I was wondering the same thing or something similar.
If we are taxed on prize money, shouldn't we be able to deduct expenses?
Can this be done on a schedule C?
If we are taxed on prize money, shouldn't we be able to deduct expenses?
Can this be done on a schedule C?
Bourbon Barrel BBQ
is one Smokin' Farker
Yep my team is setup as an LLC.
Nordy
Knows what a fatty is.
DISCLAIMER - (I deliver babies.. not tax forms)
Seems like there is a tax rule that you can only show a loss in a "business" for a limited number of years before it becomes a "hobby" and you can't deduct a loss on a "hobby"... But i think you can still offset winnings with documented expenses.
Maybe some tax professional can chime in...
Seems like there is a tax rule that you can only show a loss in a "business" for a limited number of years before it becomes a "hobby" and you can't deduct a loss on a "hobby"... But i think you can still offset winnings with documented expenses.
Maybe some tax professional can chime in...
jbrink01
is One Chatty Farker
My comp team operates under my catering llc, so yes, it's financial performance factors into my tax liability.
SHBBQ
Knows what a fatty is.
I'm no tax professional, but I would just change the "business name" every few years if you cannot turn a profit with it. different name, different business. maybe.
Ford
is One Chatty Farker
It's a hobby so you can offset expenses against income. Just can't take a loss. No need to incorporate. Just keep receipts and fill out the IRS form.
B
BC Squared
Guest
We cater a time or two...so that seems like the way to go. Any other suggestions are appreciated!
MoKanMeathead
is Blowin Smoke!
You can claim hobby expenses up to the amount of reported income...however, hobby expenses are subject to the 2% of AGI restriction. Assuming you did have any other 2% deductions you would pay tax on your winnings - up to 2% of your AGI.
...At least that is the way I read the form and instructions.
...At least that is the way I read the form and instructions.
HawgNationBBQ
Take a breath!
LLC here.
trueque
Full Fledged Farker
LLC here for 2012.
Sent using Tapatalk
Sent using Tapatalk
Gowan
is One Chatty Farker
LLC in 2011.
It's cleaner for us to keep the team's finances totally separate from the restaurant books.
Avoids the unpleasant surprise of the Head Cook getting 1099s on his personal taxes. Won't save you any money though. If you win more than you spend, you're gonna have to give the gubmint their cut, plain and simple.
It's cleaner for us to keep the team's finances totally separate from the restaurant books.
Avoids the unpleasant surprise of the Head Cook getting 1099s on his personal taxes. Won't save you any money though. If you win more than you spend, you're gonna have to give the gubmint their cut, plain and simple.
Lake Dogs
Quintessential Chatty Farker
I am a tax pro. I dont/wont offer tax advice here. However, this IS the correct answer. Unless you're actually a caterer, etc. and this is a business, there is no need to LLC, etc. However, like Civil said above, IF you are a caterer or in the restaurant business, you may want to do it for any number of reasons; he gave a good one.
All expenses, gas, mileage, rubs, fuel, meat, entry fees, etc. etc. etc. can be used to offset any winnings. Very few teams, when you factor in ALL the costs, actually have to report $$$ income.
athenslb57
Knows what a fatty is.
Schedule C?
Gowan
is One Chatty Farker
That's certainly true based on contest winnings alone. It's when you factor in revenue from things like class fees, product sales and sponsorships where you cross into the black. At least it was for us, anyway.
The Cosmic Pig
is one Smokin' Farker
I won $750 at a comp last year and my tax folks said I couldn't deduct expenses because they had to be over some percentage of income or something or other gobbledy gook like that. What Meathead said here sounds something like what I was told. But I had to pay on the whole $750 and couldn't deduct chit! :tsk:
tdwalker
Full Fledged Farker
+1 Hance & Ford
I just spoke last week with the accountant who does our taxes, and he agreed with the above.
